South Korea's financial regulators are targeting February 2027 for the first phase of a broader market overhaul that would allow traditional securities such as stocks, bonds and funds to be issued and traded in tokenized form, with stablecoins eventually supporting onchain settlement.

Officials from the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) outlined the roadmap on Friday as part of efforts to establish infrastructure for digital securities markets.

Kwon Dae-young, vice chairman of the FSC, said the authorities want to create the foundation for tokenized issuance and circulation across a wider range of conventional securities.

"Authorities will seek to lay foundations to facilitate the tokenized issuance and circulation of more traditional types of securities, including stocks, bonds, and funds, with an ultimate goal of completely transforming and upgrading capital market infrastructures for digital connectivity," Kwon said.

The plan would expand South Korea's existing security token offering (STO) framework beyond fractional investment products and ultimately establish a broader digital capital market infrastructure. Tokenization records ownership rights on a blockchain, which backers argue can streamline settlement and record-keeping compared with conventional intermediated systems; regulators globally are still working through how to fit the technology into existing investor-protection rules.

South Korea's Tokenized Securities Roadmap

The first stage is scheduled to begin in February 2027. It will cover several areas, including the Electronic Registration Act, money market funds and bonds for institutional investors, unlisted stocks held through trust structures, and publicly offered fractional investment securities.

The second stage would expand tokenization to all publicly offered securities. The final stage would introduce onchain payment infrastructure connected to stablecoins.

The timing of the second and third phases has not been fixed. Regulators said their implementation will depend on the results of the first phase, technological adoption among market participants, and legislation concerning stablecoins.

The approach would therefore move gradually from selected securities toward a wider tokenized market rather than introducing full-scale tokenization at once. That phased method mirrors how other jurisdictions have approached digital-asset market reform, testing narrow use cases before broadening scope.

South Korea's regulators also set limits for individual participation. Individual subscriptions will be capped at the lower of 30 million won, equivalent to $22,000, or 5% of an offering's total issuance volume.

Annual net purchases through over-the-counter (OTC) exchanges will be limited to about $74,000.

Financial Firms and Issuers Face New Requirements

Existing licensed financial institutions will be permitted to manage tokenized securities under their current licenses, allowing established market participants to take part without necessarily obtaining an entirely new license.

Issuers that operate their own securities accounts, however, will face additional financial and technical requirements. Such issuers must maintain at least $3 million in equity capital and comply with specified information technology and cybersecurity standards.

The requirements reflect the regulators' focus on building infrastructure capable of supporting tokenized securities while maintaining safeguards around market operations and digital systems.

The planned framework would also extend security token offerings beyond the fractional investment products that have previously represented a significant part of South Korea's tokenization efforts.

Korea's Digital Market Ambitions Reflect Wider Asian Shift

The initiative comes as Asian financial centers expand their work on blockchain-based financial infrastructure.

South Korea has a large retail investment base, with 11.3 million verified cryptocurrency users. Its stock market also regularly records daily trading volumes comparable with those of cryptocurrency exchanges.

The broader Asian market has become increasingly important to the global digital-asset industry. An Organization for Economic Co-operation and Development (OECD) report cited in the source material said Asia recorded the highest growth rate among regions and accounted for 30% of global stablecoin trading activity in 2025.

Other major financial centers in the region are pursuing related initiatives. Japan announced plans the previous week for a national blockchain settlement system covering stocks and government bonds, with deployment targeted for the early 2030s. Singapore, meanwhile, finalized its stablecoin licensing framework this week.

South Korea's roadmap places the country among the Asian jurisdictions seeking to connect conventional financial markets with blockchain-based infrastructure. Its proposed third-stage payment system would eventually link tokenized securities with stablecoin-based settlement, although that stage remains dependent on the progress of the earlier phases and pending legislation. What to watch next includes the pace of enabling legislation in South Korea's National Assembly, the results of the February 2027 first-phase rollout, and how quickly market participants adopt the new infrastructure.

Source: CoinDesk